Stimulus Receives Little Support

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In the latest The Nicolet Bank Business Pulse© CEOs indicate they are generally opposed to the Obama stimulus plan.

Little Support for Stimulus Plan

The study was conducted between January 27 and February 3 – just prior to the final passage of the economic stimulus plan in Congress. More than half (57%) of the CEOs indicate that they are Opposed to the plan; 23% Favor the plan; 20% were Not Sure. CEOs were also asked how familiar they were with the plan: 18% said Very Familiar; 35% Moderately Familiar; 42% Somewhat Familiar; 5% Not Familiar. Opposition is highest (83%) among those who are Very Familiar with the plan; support for the plan is highest (34% Favor) among those who are Somewhat Familiar. There are no differences between CEOs of goods producing companies (57% Oppose) and service companies (54% Oppose).

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The primary factor that appears to be of greatest concern among CEOs in the NewNorth is the balance between tax cuts and spending in the plan. At the time the survey was conducted, the balance between tax cuts and spending in the bill was $550 billion in new spending and $275 billion in tax cuts - very similar to final balance on passage (which was $507 billion in new spending and $282 billion in tax cuts). Only 17% say the balance is about right; 57% say there should be more tax cuts and less spending; 20% say there should be equal tax cuts and spending; 6% say there should be more spending and less tax cuts.

Do You Favor or Oppose Economic Stimulus Plan: CEOs New North

Not sure

20%

Oppose

57%

Favor

23%

Executive Summary: End of Q4/08

“I’m not getting information; I'm not managing.” John Torinus, President & CEO — Serigraph, Inc

There is no difference between CEOs of goods producing companies and service companies regarding the balance of cuts and spending. CEOs were also asked how important various elements of the stimulus plan are in producing stimulus: 56% say it’s Very Important to speed up the depreciation of capital investments, allowing 50% of the investments to be written off immediately; 37% say it’s Very Important to allow businesses to claim tax credits on past profits dating back five years instead of two years;

29% say it’s Very Important to create new jobs with government spending on the nation’s infrastructure. Other Very Important elements include: 24% favor a $500 tax cut for individuals and $1,000 for couples earning under $200,000 per year; 16% favor spending $19 billion for science & technology, university research facilities, biomedical research and wireless/broadband expansion; 13% favor spending $68 billion for education, classroom modernization, increased Pell grants and early childhood education; only 5% say spending $80 billion to help states facing budget shortfalls is, Very Important.

Importance of Various Elements of The Obama Stimulus Plan Speed up depreciation on capital investments

56%

Give business tax credits on past profits

37%

Create jobs with spending on infrastructure

29%

$500 tax cut for individuals; $1000 couples $19 billion for science & technology $68 billion for education

24% 16% 13%

$80 billion for states Percent Saying “Very Important”

How the Survey is Conducted The Nicolet Bank Business Pulse© is a Quarterly Study of CEOs and business leaders in the NewNorth (Brown, Calumet, Door, Kewaunee, Manitowoc, Marinette, Oconto, Outagamie, Shawano, Winnebago Counties in Wisconsin and Menominee, Michigan). This study was conducted between January 27 and February 3, 2009. Participants include: 27% in manufacturing; 24% in services; 18% retail trade; 4% wholesale trade; 6% finance, real estate, insurance; 5% in transportation, communications, utilities; 6% in construction; 10% in other industries. 20% have fewer than 6 employees; 27% have 6-25; 21% have 26-50; 9% 51-100; 12% 101-250; 5% 251-500; 4% 501-1,000; 3% have 1,001 or more. Questions to Dr. David G. Wegge (920) 217-7738; [email protected]

CEOs lack confidence in President Obama and his economic team to successfully handle the crisis. Less than one in ten (9%) say they have a Great Deal of Confidence; 30% have a Moderate level of Confidence; 45% have Only a Little Confidence; 17% say they have No Confidence.

Summary CEO attitudes regarding the economic stimulus plan appear to mirror the concerns that Republicans in the House and the Senate expressed as the legislation wound its way through the congressional process. Given the general political leanings of CEOs in the NewNorth, this is to be expected. Once President Obama signs the legislation we will have to wait, perhaps a long time, to determine if this legislation has the intended consequences that the President and the Democrat Congress are hoping for.